The RM50 billion 1MDB scandal can not be covered up unless the Federal government comes clean (e/m/c)

Press Statement By Penang Chief Minister Lim Guan Eng at the Penang State Assembly On 17 May 2016

The RM50 billion 1MDB scandal can not be covered up unless the Federal government comes clean by :

-making public the Auditor-General’s Report on the scandal,
-tabulating the cost of the negative impact of the first debt default by a government entity last month and early this month of USD 50 million in interest payments; and
-justify why no action is taken against those responsible by the Malaysian authorities for such a huge scandal when arrests and charges are made by overseas countries against those responsible for this huge scandal.

What is the Malaysian government hiding or trying to cover up by refusing to make the Auditor-General’s report public?

Bailing out 1MDB by transferring all its remaining assets to the Ministry of Finance of MOF will not clear up the mess because 30 million Malaysians still have to bear the debt burden of probably more than RM55 billion. Presumably all the 1MDB debts will also be assumed by MOF. Otherwise how can 1MDB pay its debts without any assets, which would then still require the Malaysian government to bail it out as it is a government-owned entity and the Federal government has also guaranteed some of 1MDB loans. Even the type and value of assets from 1MDB transferred to MOF is subject to dispute. The remaining tangible 1MDB assets are the Tun Razak Exchange Bandar Malaysia land in KL(given at cheap rates without open tender to be resold BY 1MDB at a huge gain), the 234 acres of land in Air Itam bought for RM1.08 billion, RM2.3 billion in cash and RM 14 billion of investment units of doubtful value. Against this are debts amounting to RM50 billion and if interest payments are included then the debt quantum could easily exceed RM55 billion.

Further the amount of donation in the Prime Minister’s personal accounts has escalated to RM4.2 billion according to allegations by reputable international business and news agencies. Despite promises to file a court action in their home countries for defamation, no such action has been initiated by the Prime Minister internationally.

Due to serious unanswered questions that still remain about 1MDB, the Penang state government will freeze all land transactions on the 234 acres of land bought by 1MDB until there is full clarity, certainty and competency in fully accounting what went wrong. Even for the Penang land, 1MDB did not purchase 100% ownership of the land. This is a ridiculous purchase as no serious housing developer would purchase land unless they get 100% control because Malaysian laws require any development to be approved by all 100% of the owners. Further when the land was bought as a follow up to the 2013 general elections, the Prime Minister himself had promised to build 9,999 public housing to accommodate the more than 2,500 squatter families there. There are genuine public concerns whether these promises are still practical and tenable in view of the huge cost invested and also without 100% land ownership. The first priority of the state government is always to the more than 2,500 squatter families.

For this reason, unless the overall questions listed above are fully accounted for, the Penang state government would not allow any land transactions whether an application of change of land ownership or consent to charge must obtain the prior approval of the Penang state exco.